By 30 September 2025, SARS achieved R924.7 billion in net revenue, exceeding initial budget projections by R18 billion. This unexpected windfall is largely credited to intensified compliance efforts through SARS’ target compliance programme, which yielded over R131 billion — a significant increase from R122.6 billion in the previous year.
SARS’ Compliance Crusade: A Double-Edged Sword
Over and above the spoils of war from SARS’ Compliance Crusade, strong performance in Corporate Income Tax, PAYE, Dividend Tax, Domestic VAT, and General Fuel Levy portfolio collections bolstered these gains.
However, this financial triumph carries implications. SARS’ increased collections stem from a strategic shift towards aggressive compliance and debt collections, making the tax authority more vigilant and unforgiving towards late payments and undeclared liabilities. Behind the numbers lies a palpable warning to taxpayers: the “supportive” rhetoric signals a no-nonsense operational stance that demands immediate attention and proactive engagement.
Options Available to Resolve Tax Debt
Where a taxpayer simply cannot afford to settle their tax debt, it is crucial to approach SARS in the legally correct manner, to successfully request the appropriate debt relief from the revenue authority.
Taxpayers who find themselves in this situation, anticipating only coal in their Christmas stockings, do have solutions available to them, but none so favourable as an application for a compromise of tax debt (“the compromise”). In recent times, SARS have become more amicable towards this, showing great compassion for the financially constrained taxpayer.
Compromise of Tax Debt
To successfully compromise on the tax debt, the taxpayer needs to show current financial hardship, together with an estimation of their net worth. However, bear in mind that prior lavish spending could be a kink in the armour SARS uses to decline the initial proposal and request quite a drastic increase in the settlement amount, including the write-off of interest and penalties which have been attributed to the capital amount owed. The taxpayer then offers to settle (in part or in full) the capital amount owed to SARS, either by lump sum or instalment payments. This proposal, when accepted by SARS, must be reduced to writing.
It is also important to note that a compromise can be applied to any form of tax debt and across all tax types, be it Personal or Corporate Income Tax, VAT and/or PAYE, and regardless of whether it is for an individual, trust or company. There is relief available to all taxpayers who qualify for the compromise of tax debt.
Payment Arrangements with SARS (Deferral of Payment)
Taxpayers that do not satisfy the requirements for a compromise but cannot afford to settle a tax debt in a lump sum payment, still have the option to apply and enter into a payment arrangement with SARS. Known as a deferral of payment, this is where the taxpayer applies to SARS, subject to certain conditions, for a payment agreement in which the taxpayer can settle the outstanding amount in monthly instalment payments over time.
This is an attractive option to many taxpayers, as it lessens the burden and reduces a large number that is expected to be settled immediately, to an amount that is manageable and convenient to the taxpayer and SARS as it is paid in monthly instalments.
With a payment arrangement, there is no write-off of interest and penalties, and the entire amount is settled with monthly instalments.
Risks of Non-Compliance: What is at Stake?
Ignoring SARS’ enhanced collection drive can have devastating consequences. Non-compliance opens the door to drastic enforcement actions, including:
- Asset Seizure: SARS may attach and sell movable and immovable assets to recover debts.
- Sheriff Enforcement: Court-appointed sheriffs can execute warrants to seize goods and enforce payment.
- Credit Blacklisting: Defaulting taxpayers face blacklisting, crippling access to credit and business opportunities.
- Company Liquidation: Businesses with unresolved tax debts risk forced liquidation to satisfy SARS claims.
- Offshore Asset Repatriation: SARS now aggressively pursues international assets linked to illicit or unpaid taxes.
These enforcement mechanisms are daily realities for many South Africans, signifying a zero-tolerance policy for tax arrears.
SARS’ 2025–2028 Medium-Term Strategy involves a transformative modernisation project, Tax Administration 3.0, leveraging artificial intelligence, digital identities, and real-time risk profiling to identify non-compliance swiftly and accurately. This means fewer opportunities to evade detection or delay settlements.
Act Now or Face the Consequences this Christmas
The R18 billion surplus declared by SARS is more than a financial milestone; it is a clear message that the revenue service has sharpened its focus on compliance and collections. Behind the guise of “support” hides a potent collection strategy that prioritises fiscal sustainability, weeding out those who fail to meet their obligations.
Through carefully negotiated solutions, there is the possibility of a fresh start — a fair and balanced outcome that recognises the taxpayer’s situation and provides the breathing room necessary to regain financial stability. Approaching SARS correctly and legally, can make all the difference, turning a seemingly insurmountable tax debt into a workable and mutually beneficial settlement for both parties.
As a rule of thumb, any and all correspondence received from SARS should be immediately addressed by a qualified tax specialist or tax attorney. This will not only serve to safeguard the taxpayer against SARS implementing collection measures but also being specialists in their own right, the taxpayer will be correctly advised on the most appropriate solution to ensure their tax compliance.
It is recommended that a request for compromise / deferral be made in a proactive manner, even before a Letter of Final Demand is received, rather than waiting for SARS to come knocking at your door.
